Budgeting For Richer or For Poorer

On your wedding day, you don’t just marry your fiancé – you also find yourself married into a new financial situation. For some brides and grooms, that’s a bonus. For others, it’s an unexpected challenge.

Marriage is all about trust, commitment and communication. If you can’t “talk money” with one another, you may be headed for serious conflict.

The time to reach agreement on how to handle finances as a married couple is before you wed. So in the months before your wedding, add budget discussions to your “To Do” list.

The following tips from Consumer Credit Counseling Services (CCCS) will help you and your partner begin married life on a solid financial foundation.

• Discuss Your Views Towards Money. People have different feelings about how to handle money. You could be a saver while your partner is a spender. Some people worry about being in debt; others take a more carefree attitude. Talk about those issues. Know your partner’s preferences regarding spending, borrowing, saving and investing.
• Discuss Your Financial History. Be honest about your outstanding debts and financial obligations. These might include child support payments and/or credit cards, school loans, car loans and other debts. While it may not be an easy discussion, communicating openly before the wedding will eliminate unpleasant surprises after you are married.
• Discuss Your Financial Future. In addition to goals for career and family, you probably have specific financial goals. Share these with your partner and listen while your partner does the same. Reach an agreement on both long-term and short-term financial goals. Then, develop a written plan that outlines what financial goals you hope to achieve by what date.
• Develop a Budget. Financial success begins with smart money management. Agree on how much money to spend each month and how much to put in savings. That’s a budget in its simplest form. Flesh out the details and you’ll have a budget road map to guide where your dollars go each month. You may want to use a spreadsheet to detail mandatory expenses (such as rent, groceries, household utilities, transportation, insurance and other “needs”) and discretionary spending (eating out, gifts, clothing, entertainment and other “wants.”) See CCCS’s budget calculator at www.cccsstl.org/debt_test/cccs_monthly_budget_calculator.asp
• Agree on How to Manage Your Finances. Lay the groundwork for day-to-day debt management. Agree on who will be responsible for paying bills and monitoring the household budget. Will you have a joint checking account, two separate accounts or all three? Who will take charge of balancing the checkbook(s) and reviewing the monthly bank, credit card and other financial statements?
• Plan for the Unexpected. Being a responsible money manager means planning for unforeseen life events. These might include a job layoff, an unplanned pregnancy, home or car repairs, medical needs or a household move. If you are able to withdraw money from savings to cover such emergencies, you won’t have to borrow money. Credit Counselors typically advise having three to six months’ worth of living expenses readily available in savings.
• It takes Practice! Keep in mind that good money management takes practice. Don’t hesitate to re-adjust your household budget when necessary. Once you’re married, you may need another discussion about which purchases are luxuries and which are necessities. You may find it necessary to set new limits on family spending during tight periods or to prepare for a major purchase. The important thing is to communicate openly and honestly and work together as a team.
• Consult a Professional. If you and your partner disagree on major financial issues or need help with money management, consult a professional. This is particularly important if you are considering joint credit. Trustworthy Consumer Credit Counseling Service (CCCS) agencies can help you assess your current financial situation and develop a plan to achieve your goals.